There were never any plans to encourage people to take vigilante action to tackle louts, Downing Street insists.
Ministers say they do not want people fighting crime alone
Home Secretary John Reid reportedly wanted to use the slogan "don't moan, take action" as part of Tony Blair's plan to tackle anti-social behaviour.
The PM's spokesman said the slogan had been discussed but was never a policy.
The intention was to encourage people to report problems to the police rather than "suffer in silence", Mr Blair's Respect chief Louise Casey said.
Mr Blair's official spokesman later said: "We have never encouraged people to be vigilantes and never would do so."
The problem was that people could become downhearted and think there was no point in reporting problems to the police or other authorities, he added.
According to the Sunday Telegraph, the Cabinet committee charged with the respect agenda had been briefed about the publicity plan by Mr Reid.
The paper said the campaign would be centred around the slogan: "Don't moan - take action - it's your street too".
But Ms Casey, who attended the meeting, said it was a "complete misrepresentation" to suggest that the home secretary wanted the public to "go out and be vigilantes, go out and have a go".
"That's nonsense," she told BBC Radio 4's Today programme.
"What's very unfair here is we must find a way to not only encourage the public not to suffer in silence, but to come forward. Don't stay at home worrying about things.
"We've got neighbourhood policing teams right across the country - they'll be in every single ward by 2007.
"And we have got local authorities now with all the tools and powers, all kitted up and taking action."
Ms Casey told the BBC the slogan was "a line" in a seven page "discussion document that we are still discussing".
She added: "If the Cabinet can't have a restricted document which goes to them, which says we must take action across government, we must take action across the police and local authorities and we must inspire the public to take action ... then we have a problem."
A spokesman for Mr Reid said ministers were considering a number of ways of making people aware of how anti-social behaviour can be tackled.
For the Conservatives, shadow home secretary David Davis said there were not enough police officers able to carry out a neighbourhood role because of "bureaucracy and targets".
'Focus on basics'
"The public themselves can be forgiven for treating this with a degree of scepticism," he told Today.
"They will tell you that if they complain about even a burglary, they'll get a police number but no investigation.
"If they actually take any action themselves, they'll end up on the wrong side of the law.
"I'm afraid this is out of touch with what is actually happening on our streets."
The home secretary should focus on "getting the basics right", like getting enough police on the streets, with enough powers to act against criminals and once they are convicted, to keep them in prison, he said.